Increased slaughter activity revives optimism at auctions

Chicago live cattle last week climbed to their best levels since early March

Cattle prices at Manitoba auction yards have shown some considerable improvement over the past month, as activity starts to slow down ahead of the summer and earlier disruptions due to the COVID-19 pandemic have largely sorted themselves out for the time being.

“It certainly has perked up,” Allan Munroe of Killarney Auction Mart said of the improvements in the cattle markets over the past few weeks.

Killarney introduced online bidding in its May 25 sale, which Munroe described as a success despite the learning curve. “It’s not a replacement for filling the place up with people, but it’s another tool in the tool box.”

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While the North American fat cattle slaughter is still running behind pre-pandemic expectations, the reopening of a number of slaughterhouses and packing plants was helping bring some more optimism to the markets. Munroe noted a packing plant in Ontario was back in the Manitoba market.

“Right now we’re certainly seeing some optimism, which is a welcome relief,” said Munroe.

Live cattle futures in the U.S. rose to their best levels since early March over the past week, with strength there spilling into the Canadian feeder market as well. Munroe said the lighter-weight cattle were seeing the most strength.

Feeder steers in the 400- to 500-lb. range were seeing top-end bids above $250 per hundredweight at most locations. Heifers in the same weight class were fetching anywhere from $175 to $225/cwt.

D1 and D2 butcher cows were generally priced in the $80 to $90 range, well above the $65 to $75/cwt prices seen in late April.

In addition to eastern and western demand, Munroe said local interest in cattle to put out on grass also supported prices during the week.

Pasture in the southwestern corner of the province has seen a “a big improvement over the past two springs,” according to Munroe. Good moisture and warm temperatures were pointing to a good hay crop for the first time in a few years, he said.

Many auctions will soon hold their final sales of the season, or may already be shutting down ahead of the summer.

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Phil Franz-Warkentin - MarketsFarm

Phil Franz-Warkentin writes for MarketsFarm specializing in grain and commodity market reporting.

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